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Impasse immediate over plan to revise Pa. pension system

May 29, 2013

State Senate lawmakers are beginning the public vetting of a three-part proposal from the governor’s office to deal with Pennsylvania’s multibillion-dollar pension debt.Months of debate leading up to the hearing have only made the groups on either side of the issue seem more entrenched than ever.

Gerry Oleksiak, vice president of the Pennsylvania State Education Association, is reiterating the union position that Gov. Tom Corbett’s plan to reduce the future benefits of current employees is an unconstitutional breach of contract.

“When our pension benefits were raised, we had to agree to that. We had – every individual member in the system had to sign off on that,” Oleksiak said. “And I guess if the governor wants to poll every one of our members now to see if they want to go into a defined contribution plan, he’s certainly welcome to do that.”

The governor’s budget secretary acknowledges part of the reason the state faces huge public pension debt is because lawmakers under former Republican Gov. Tom Ridge approved higher benefits while underfunding the pension plans.

He says that’s why the structure of the pension plans should be changed – so that it can’t be fiddled with in the future.

Budget chief blasts union opposition

Budget Secretary Charles Zogby also is urging lawmakers to disregard arguments from public sector unions and left-leaning groups, who have called the governor’s proposals unconstitutional and say it will cost the state more to shift employees into a new kind of retirement plan.

“These arguments made by the special interests in Harrisburg against pension reform are intended to muddy the waters, instill fear, spread mistruths in the hope that enough noise against good public policy will prevent its progress,” he said.

Zogby says an independent actuarial analysis shows switching employees to a different kind of retirement plan would not significantly increase costs or add to the unfunded pension liability.

State Sen. Rob Teplitz, D-Dauphin , called the governor’s pension proposal “drastic” and says it turns a blind eye to the blame at the feet of those who had a hand in underfunding pension systems while hiking up benefits.

“Many of the same people who are advocating for changes now in the Corbett administration and in the general assembly were part of those causes 10, 12 years ago,” he said. “And so it begs the rhetorical question of how do we trust the same people who caused this problem in the first place to fix it?”

Teplitz said state and public school employees are being “demonized” in the pension overhaul debate.